Disadvantages of Cloud Backup

While the benefits of Cloud Backup are discussed repetitively in full depth by pretty much all Backup Software providers out there, it is important to consider the disadvantages of the cloud backup strategy as well.

All technologies and strategies have upsides and downsides and cloud backups have their own. When considering cloud backup for your business, cloud backups should augment a local backup strategy–not replace it—because local backups have their own advantages over other backup strategies.

High Cost is the Major Disadvantage

Consider this, in 2021 you can buy an enterprise grade 16 TB drive for just $350 and it comes with a 5 year warranty. This means you can return it and get another one if it breaks within five years. The actual cost, hence, is 36 cents per month per terabyte. So even if you buy two drives and use a mirror, just in case, it’s 72 cents per TB per month of actual hardware cost. If your backup drive lasts longer than five years, and it likely will, the cost per month and terabyte will be far lower. Naturally the cost doesn’t include electricity and the cost of running a separate computer (if needed) and other circumstantial costs, but it gives you an idea how overpriced cloud storage and generally all cloud services tend to be.

They Want to You to Rent, not to Own

All software-as-a-service and infrastructure-as-a-service uses the same scheme. They want you to be poorer, i.e. own less or ideally nothing. This puts you into a 100% dependency. No cash, no service. Sure the benefit is with little money and low upfront costs you could rent a rather large IT “farm” and use it in the short term. Just like it’s cheaper to rent a Rolls Royce than to buy one. But in the long term, most likely, it’s a lot cheaper to buy the hardware, especially if you plan to use it intensively. If you only need the Rolls Royce to drive to a few job interviews, it’s a no-brainer: go rent it! But not all scenarios are obvious at first sight. For example, if you run a small website and rent a tiny virtual machine with a cloud provider, it makes sense to pay, say $10, a month for it. If your website requires 100 TB storage for a database, however, it would make a lot of sense economically not to host it with a third party because within just a few months the fees would amount to the cost of buying the actual hardware and hosting it yourself.

On average, when you rent a house for about 12-15 years, you end up paying more than if you had bought the house cash. In the same time period, how much money would the owner have spent for upkeep, taxes, and maintenance? Not much. So that’s the “clockwork” of capitalism in a nutshell and using cloud services is the new way of being a tenant, and how the cloud service companies make the big bucks. Whether it’s a wise decision to own or rent, well that’s up to you to decide but as we all know, many people end up making the wrong decision and only realize it years later.

Whenever a large company makes big bucks, the message is clear: they are overpricing their services and products. Otherwise they could simply charge you a lower price and remain in operation without affecting the quality of their products.

Let’s stay with the analogy of a house for a moment. When you rent a house, the benefit is you could move out rather quickly to another city or another house that’s different, as your needs in life change. But if you rent for too long, you end up overpaying for that freedom. The same phenomenon applies to cloud services. It’s all good when it’s short-term but once you have long-term plans, it doesn’t make sense to rent, neither a house, nor cloud storage, provided that you have the money of course. Many people can never buy a house because they don’t earn enough money. The exact same scenario applies to cloud services as well; it takes a certain amount of capital to set up the hosting infrastructure needed, even if it’s just to host a simple server reliably.

Confidentiality: They Can See and Read Your Files

Cloud providers host files and even if they claim they are encrypted at rest, many cloud providers can open them. See for example Microsoft’s terms and conditions. Unless you own a third-party solution that encrypts files before uploading them, the cloud provider likely has a way of accessing and reading your files.

Dependence on a Third Party Provider

Cloud backups are convenient. You don’t have to buy hardware to store the data or replace it when it breaks; however, you rely on your provider to do this properly and reliably.

Many providers at this point in time are funded companies and may disappear overnight when funding is cut off. This has occurred in the past when no mergers or takeovers are accomplished by the company’s investors. Sometimes a takeover of the cloud provider does take place but the service agreement and pricing is changed in such a way that you no longer find the provider suitable for your needs. The possibility that you may be dissatisfied with your provider brings us to the next point: switching providers.

Difficulties Switching Providers

Naturally cloud backup providers have their own infrastructure, which includes various software components. This infrastructure is efficient but it is also proprietary. Cloud providers are interested in long-term partnerships with their clients as client acquisition is generally expensive (Google charges about $100 a click for cloud backup related keywords). It is then no surprise that there aren’t many open standards that would allow a painless and quick way to switch providers, as it is not in the interest of cloud providers.

However, if your company has a serious amount of data in the cloud, there is another issue: bandwidth.

Dependence on Internet Provider and Bandwidth

Cloud storage is useless if you can’t connect to it efficiently, which means high-speed and low-cost. If your business generates terabytes of data each month, all that data needs to be uploaded a little faster than it is being generated, to allow for some slack time. You would need to provide internet connections with the required bandwidth and pay for these each month, which increases not only the overall cost of a cloud backup system, it also creates a dependency on your internet provider and their quality of service.

If your provider is the only one in the area serving the connection speeds you need at an affordable price point, chances are they could sooner or later exploit their monopoly and radically increase prices in the medium term.

Yet, the main problem with cloud backups in the U.S. at this point in time is that most businesses have no access to an affordable, high bandwidth internet connection. As a rule of thumb, for each GB of data per day you would want to provide a Mbps upload speed in order to be able to finish uploads overnight within a reasonable time.

Hyper-V backup over the cloud is an interesting subset of cloud backups and deal with very large files that need to be updated to the cloud on a daily basis. While cloud backup providers figured out ways to accomplish this kind of Hyper-V Backup over relatively slow connections (see for example Step-by-Step Windows 11 Hyper-V Backups), the issue of recovery still needs to be considered.

Recovery Considerations: It’s Very Slow Compared to Local Recovery

For the reasons stated above, a few cloud providers offer seeding and express recovery using external hard drives shipped by courier in case you have to recover a large amount of data within a short time.

If internet connections were as fast as local area network connections, this kind of service wouldn’t be necessary. Because recovery of cloud data depends on the availability of good internet bandwidth it may not be suited as a standalone backup strategy. For quick recoveries it’s best to have a local backup available. Cloud backups should be considered for rare occasions when local storage is destroyed, for example by natural disasters, vandalism, theft, etc.

Consider the Future

The guys at BackupChain started off in 2009 with a simple prediction: year after year, storage prices will keep going down, CPU power will improve, internet speeds will get better, internet costs will drop dramatically. What does this mean? It means that with every year that passes, cloud services are becoming actually less attractive simply because with every year it becomes more economically feasible to host your own cloud online backup system. For example, if your company has several offices, you can easily connect them together and keep your data confidential that way, too. If you own a small company, you could use your home office at your residence as a backup destination instead of relying on a third party. And so on…

What are Cloud Backup Advantages?

For an in-depth discussion of cloud backup advantages, see my post Cloud Backup Advantages and Disadvantages, Totally Honest.